If you’re just tuning in, this is part of the continuing saga of how my husband and I got out of debt. You can go back to the beginning[5] if you missed something.

As I recount our story, please remember that this is how we did it. I believe that this will work for many people. But, I’m no finance coach. I’m not going to say that this is “the only way.” But, this is the way that made sense to us. We are both indebted to God, foremost, because we know that all good things, including a debt-free life, come from him.

But, we owe a huge amount of gratitude to Dave Ramsey[6] for the tangible direction we gained from his programs in order to dig out of debt. Some people don’t like “my good buddy Dave.” That’s okay. All I can say is that his hard-hitting, no-holds-barred manner made sense to me. I had listened to other radio financial advisers in the past, but none of them encouraged me or motivated me as Dave did.

The next step for us was to get our “debt snowball” rolling. This basically means that we systematically went after our debt.

Remember back in part three of my story[9], the part about writing down all our debts? Well, though we disagreed at first on which debts to give priority to, in the end we followed Dave Ramsey’s advice and put our debts in order from smallest to largest. We maintained paying the minimum payments to all our creditors, but we threw all our “extra money” at the smallest debt until it was gone.

Extra money? What’s that?

Back in June 2007 when we woke up and smelled the stinking debt, it didn’t seem like there would ever be “extra” money. But, slowly by God’s grace and some hard work (and fewer dinner’s out) we were able to have something extra to put toward our debt.

However, we had to be creative. Proponents of the debt snowball say, pay your minimum expenses and then apply any leftover funds toward paying down debt. In our case of being self-employed, we knew that if we did that and then faced a decrease in business, we’d quickly be back where we started. So, what we did was squirrel away one month’s budget. Once we had that in reserve, anything else that came in was sent to the credit card company. In this way, we knew we could pay the mortgage, feed the kids, have a little cushion. I suppose one would say that we just had a bigger emergency fund. But, this was just insuring that we had a salary to pay the next month’s bills.

It was amazing to see how God blessed us with “extra.”

Birthday and Christmas money (ours not the kids) felt more satisfying to go, at least in part, toward our debts.

Garage sale proceeds went toward our debts.

An unexpectedly high commission from my husband’s design subcontracting went toward our debts.

Any funds gained from selling a magazine article went toward our debts.

Slowly, but surely we were able to chip away. And once that first creditor was paid in full, we applied anything we’d been paying Credit Card A and added that to the minimum payment that was already going toward Credit Card B. And that’s how the snowball rolled.

Eventually, we found ourselves with one credit card left to pay. We were able to pay that off earlier this year. Thanks be to God.

We may be out of the hole, but it doesn’t mean that our financial life is without its challenges. We know how very easy it is to get sucked in. Our budget is not as tight as it was two years ago. But, we are well aware that jobs are precious and rarely “sure things.” Since selling our home in Kansas, we’ve built up our emergency fund and try to keep ourselves disciplined to save more each month. And that’s no easy thing.

So, what do you do to save money? I’d love to hear it.

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